Departing POGOs told to settle taxes

THE BUREAU of Internal Revenue (BIR) will still go after Philippine offshore gaming operation (POGO) companies that are leaving the country to make them pay their tax obligations, the Finance chief said.

Citing a report from the BIR, Finance Secretary Carlos G. Dominguez III said the bureau would look into the POGO companies that were reportedly leaving to check if they have settled their tax dues.

He said one of the companies that expressed its intention to leave, Don Tences Asian Services Solutions Inc., is a licensed operator based in the country and have already paid its 5% franchise tax to the bureau.

However, the BIR will have to check the company’s account first for other possible tax dues before allowing it to shut down.

Mr. Dominguez told reporters via Viber that one of the POGOs — Don Tences Asian Services Solutions Inc. — is a local licensee and had paid its franchise tax, “and will be subjected to investigation before it will be given clearance to close by the BIR.”

He said the other POGO that has reportedly exited the country — SC World Development Group Ltd., which is based overseas — is not registered with the bureau.

“We still intend to go after its tax dues,” he said.

Philippine Amusement and Gaming Corp. (PAGCOR) Chairman and Chief Executive Andrea D. Domingo over the weekend confirmed that the POGO business of “Suncity (Group) has left” the country.

However, Suncity Group Ltd. clarified that it would continue its junket business in Manila as it has no intention of stopping its local casino operations.

“Suncity Group spares no effort to develop itself as a global integrated VIP entertainment conglomerate. Junket business in Manila are definitely important to us and we can’t find any reason to leave Manila at this particular moment,” Suncity Group said Monday in an e-mailed response to BusinessWorld’s questions.

The Macau-based gaming giant said it would also continue developing a “VIP entertainment business in licensed gaming concessionaires in Manila.”

“In regards to the comment provided by Miss Andrea Domingo, we think she is referring to telebetting service, which has nothing to deal with the junket business that Suncity Group operates in Manila,” it added.

PAGCOR Assistant Vice-President for Offshore Gaming and Licensing Department Jose S. Tria, Jr. said over the weekend that POGO companies were leaving the Philippines due to many factors, including the BIR’s stringent tax rules and huge overhead costs as they could not resume operations. He said the industry also felt unwelcome in the country with the barrage of criticisms from the public.

Both officials of the regulator have warned that more POGO companies were expressing interest to leave as well.

Senator Emmanuel Joel J. Villanueva, chairman of the Senate committee on labor, employment, and human resources development, said Monday that exiting POGO companies “won’t be a loss” for the economy as some were known to violate Philippine laws.

“The failure of POGOs to adhere to our laws resulted in their exit. This is what happened, plain and simple,” he said.

The BIR has been struggling to collect the 5% franchise tax, which is on top of the 2% franchise fee of PAGCOR, from overseas-based POGO companies that questions its applicability.

BIR requires POGO licensees to pay the franchise tax and other tax dues before they can get clearance from the bureau, one of the requirements of the government to allow them to resume operations.

Around 10 of 60 licensed POGO companies have offices in the Philippines and the rest are based offshore. There are currently more than 200 POGO service providers.

The government collected P6.42 billion in taxes from the POGO industry last year, up 170% from the P2.38 billion generated in 2018. — Beatrice M. Laforga